BHP Billiton coy on Gag Island nickel plan
BHP Billiton coy on Gag Island nickel plan
Dow Jones, Melbourne
BHP Billiton Ltd. remains guarded over whether it intends to develop a controversial open-pit nickel mine at Gag Island in Indonesia.
BHP Billiton's stainless steel materials unit president, Chris Pointon, said no thinking has taken place around Gag Island, given the Indonesian government has yet to formalize any move that would allow development to go ahead.
"We actually have no plans at all to do anything on Gag for the moment," Pointon told analysts during a teleconference call.
"We won't even think about it until the situation becomes clearer - if and when it does," he said.
Pointon was speaking after the Anglo-Australian mining group said it would spend US$1.4 billion developing the Ravensthorpe nickel mine in Western Australia and the related expansion of the Yabulu Refinery in the state of Queensland.
Last week, the Indonesian government moved to resolve five years of regulatory confusion that has blocked some major mining projects.
In a decree, President Megawati Soekarnoputri declared that mining contracts signed for areas that later were designated as protected national forests will be allowed to proceed, despite a 1999 forestry law banning mining in those areas.
The biggest among them is a A$1.2 billion project by BHP Billiton to build an open-pit nickel mine on Gag Island, a remote and thinly populated site in eastern Indonesia.
Environmental groups say they will continue to oppose that plan because of fears that tailings from the mine could damage one of the world's most diverse coral reef systems in the sea around the island.
The United Nations is considering giving Gag Island a World Heritage listing, after recently concluding the area's reefs contain among the highest incidence of marine biodiversity in the world.
BHP Billiton has previously indicated it won't develop the Gag Island site if the area wins World Heritage recognition.
BHP Billiton has a 75 percent stake in PT Gag Nickel, the operating company that seeks to conduct mining on Gag Island, while Indonesia's PT Aneka Tambang owns the remainder.
The laterite nickel deposit of 216 million tons on the island is estimated to be valued at US$800 million with an expected mine life of 100 years.